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Planned Parenthood South Atlantic v. Baker

United States Court of Appeals, Fourth Circuit

October 29, 2019

PLANNED PARENTHOOD SOUTH ATLANTIC; JULIE EDWARDS, on her behalf and on behalf of all others similarly situated, Plaintiffs - Appellees,
v.
JOSHUA BAKER, in his official capacity as Director, South Carolina Department of Health and Human Services, Defendant-Appellant. ACCESS REPRODUCTIVE CARE-SOUTHEAST; AMERICAN ACADEMY OF PEDIATRICS; AMERICAN COLLEGE OF OBSTETRICIANS AND GYNECOLOGISTS; AMERICAN COLLEGE OF PHYSICIANS; AMERICAN MEDICAL ASSOCIATION; CENTER FOR REPRODUCTIVE RIGHTS; IPAS; IN OUR OWN VOICE: NATIONAL BLACK WOMEN'S REPRODUCTIVE JUSTICE AGENDA; NATIONAL ASIAN PACIFIC AMERICAN WOMEN'S FORUM; NATIONAL HEALTH LAW PROGRAM; NATIONAL LATINA INSTITUTE FOR REPRODUCTIVE HEALTH; SEXUALITY INFORMATION AND EDUCATION COUNCIL OF THE UNITED STATES; SOCIETY FOR ADOLESCENT HEALTH AND MEDICINE; SOCIETY FOR MATERNAL FETAL MEDICINE; WOMEN'S RIGHTS AND EMPOWERMENT NETWORK, Amici Supporting Appellee.

          Argued: September 20, 2019

          Appeal from the United States District Court for the District of South Carolina, at Columbia. Mary G. Lewis, District Judge. (3:18-cv-02078-MGL)

         ARGUED:

          Kelly McPherson Jolley, JOLLEY LAW GROUP, LLC, Columbia, South Carolina, for Appellant.

          Alice Joanna Clapman, PLANNED PARENTHOOD FEDERATION OF AMERICA, Washington, D.C., for Appellees.

         ON BRIEF:

          Ariail B. Kirk, JOLLEY LAW GROUP, LLC, Columbia, South Carolina, for Appellant.

          M. Malissa Burnette, Kathleen McDaniel, BURNETTE, SHUTT & MCDANIEL, PA, Columbia, South Carolina, for Appellees. Jane Liu, Mariah Lindsay, NATIONAL ASIAN PACIFIC AMERICAN WOMEN'S FORUM, Washington, D.C.; Julie Rikelman, Pilar Herrero, Amy Myrick, Carolina Van Der Mensbrugghe, CENTER FOR REPRODUCTIVE RIGHTS, New York, New York, for Amici Access Reproductive Care-Southeast, Center for Reproductive Rights, In Our Own Voice: National Black Women's Reproductive Justice Agenda, National Asian Pacific American Women's Forum, National Latina Institute for Reproductive Health, and Women's Rights and Empowerment Network. Janice M. Mac Avoy, Andrew B. Cashmore, Alexandra Verdi, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP, New York, New York, for Amici American College of Obstetricians and Gynecologists, American Medical Association, Society for Maternal Fetal Medicine, American Academy of Pediatrics, American College of Physicians, and Society for Adolescent Health and Medicine. Martha Jane Perkins, Sarah Jane Somers, NATIONAL HEALTH LAW PROGRAM, Carrboro, North Carolina, for Amici National Health Law Program, IPAS, and Sexuality Information and Education Council of the United States.

          Before WILKINSON, WYNN, and RICHARDSON, Circuit Judges.

          WILKINSON, CIRCUIT JUDGE.

         This case raises a question of statutory construction. We ask whether, and on what basis, the Medicaid Act's free-choice-of-provider provision affords a private right of action to challenge a state's exclusion of a healthcare provider from its Medicaid roster. The district court here issued a preliminary injunction in favor of the individual plaintiff, a Medicaid recipient, in her suit challenging South Carolina's decision to terminate Planned Parenthood South Atlantic's (PPSAT) provider agreement because it offers abortion services. The plaintiff was likely to succeed on the merits of this claim, the district court held, for two interrelated reasons: first, the Medicaid Act's free-choice-of-provider provision, 42 U.S.C. § 1396a(a)(23)(A), confers on "any individual" a private right to sue that may be enforced under 42 U.S.C. § 1983; and second, South Carolina denied plaintiff the right to select the willing, qualified family-planning provider of her choice.

         We now affirm. Based on the Supreme Court's precedents, Congress's intent to create an individual right enforceable under § 1983 in the free-choice-of-provider provision is unambiguous. In addition, a plain-language reading of the provision's mandate-that states "must" furnish Medicaid recipients the right to choose among providers "qualified to perform the service or services required"-bars states from excluding providers for reasons unrelated to professional competency. See 42 U.S.C. § 1396a(a)(23)(A), (p)(1). Finding the remaining preliminary injunction factors satisfied, we shall uphold the trial court's judgment.

          I.

         A.

         Medicaid is the nation's public health insurance program for those of limited means. The original beneficiaries of this program were low-income children and their parents, the indigent elderly, the blind, and the disabled. Schweiker v. Gray Panthers, 453 U.S. 34, 37 (1981). Since 1965, Congress has periodically expanded the program, adding, for instance, pregnant women with family incomes up to 133% of the federal poverty level as a distinct beneficiary class. See 42 U.S.C. § 1396a(a)(10)(A)(i), (l); Medicare Catastrophic Coverage Act of 1988, Pub. L. No. 100-360, § 302, 102 Stat. 683, 750; Omnibus Budget Reconciliation Act of 1989, Pub. L. No. 101-239, § 6401, 103 Stat. 2106, 2258.

         A joint federal-state effort ensures that the healthcare needs of these beneficiaries are met. In broad strokes, the Medicaid Act "offers the States a bargain: Congress provides federal funds in exchange for the States' agreement to spend them in accordance with congressionally imposed conditions." Armstrong v. Exceptional Child Ctr., 135 S.Ct. 1378, 1382 (2015). The Act, to that end, charges the federal government with crafting baseline eligibility requirements for recipients and providers, determining covered medical services, and establishing reimbursement standards to the states. See 42 U.S.C. § 1396 et seq.; NFIB v. Sebelius, 567 U.S. 519, 541-42 (2012). Cooperating states then implement the program, agreeing to abide by federal conditions in return for federal matching funds that are used for expenses such as provider reimbursements. See Armstrong, 135 S.Ct. at 1382. Such funds are substantial; federal coffers finance anywhere from fifty to eighty- three percent of state expenses, 42 U.S.C. § 1396d(b), an aggregate figure that accounts for over ten percent of most states' total revenue, NFIB, 567 U.S. at 542.

         Congress designed the Medicaid program to ensure that states dispense federal funds in compliance with federal rules. At the outset, states must propose and submit Medicaid plans for the approval of the Centers for Medicare and Medicaid Services. Douglas v. Indep. Living Ctr. of S. Cal., Inc., 565 U.S. 606, 610 (2012). State departures from federal requirements provide grounds for the Secretary of Health and Human Services (HHS) to withhold Medicaid funding, either in whole or in part. See 42 U.S.C. § 1396c; 42 C.F.R. § 430.12(c). If federal requirements are met, however, states have "substantial discretion to choose the proper mix of amount, scope, and duration limitations on coverage, as long as care and services are provided in 'the best interests of the recipients.'" Alexander v. Choate, 469 U.S. 287, 303 (1985) (quoting 42 U.S.C. § 1396a(a)(19)).

         At issue here is the Medicaid Act's free-choice-of-provider provision, 42 U.S.C. § 1396a(a)(23), which states:

A State plan for medical assistance must- provide that any individual eligible for medical assistance . . . may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required . . . who undertakes to provide him such services . . . .

42 U.S.C. § 1396a(a)(23)(A). That provision guarantees patients access to qualified and willing providers. A state plan must generally allow Medicaid recipients to obtain care from any provider who is "qualified to perform the service or services required" and "who undertakes to provide . . . such services."

         In its mechanics, the free-choice-of-provider provision comports with the Medicaid Act's dual emphasis on federal standard-setting and state flexibility. While Medicaid beneficiaries may generally seek medical services from willing providers of their choice, states retain discretionary authority to determine whether entities are medically "qualified to perform the service or services required." States may also exclude providers from their plans "for any reason for which the [federal] Secretary of [Health and Human Services] could exclude the individual or entity," 42 U.S.C. § 1396a(p)(1), or on certain state-law grounds, see 42 C.F.R. § 431.51(c)(2).

         B.

         This dispute arose following South Carolina's termination of two Planned Parenthood centers as Medicaid providers. PPSAT operates two healthcare centers in South Carolina, one in Charleston and the other in Columbia. These centers provide a range of family planning and preventative care services, including physical exams, cancer screenings, contraceptive counseling, and pregnancy testing. For four decades, PPSAT has been a South Carolina Medicaid provider that receives reimbursements for care provided to Medicaid beneficiaries. In recent years, PPSAT's South Carolina centers have treated hundreds of patients insured through Medicaid annually.

         Among those patients is the individual plaintiff in this case, who suffers from diabetes and its resulting complications. J.A. 75-78. Because doctors have advised that these complications would make it quite dangerous for her to carry a pregnancy to term, the plaintiff considers it imperative that she have access to safe, effective birth control. After the plaintiff had difficulty finding a doctor who accepted Medicaid patients and was willing to provide her preferred form of birth control, she turned to PPSAT's Columbia center. At her PPSAT appointment, the doctors inserted an intrauterine device to prevent pregnancy and informed her that her blood pressure was elevated. As a result, she sought follow-up care from her endocrinologist to control her blood pressure. Because the plaintiff was impressed with the care she received at PPSAT, she planned to switch her gynecological and reproductive health care there.

         In July 2018, South Carolina's Department of Health and Human Services (SCDHHS) terminated PPSAT's Medicaid provider agreement. SCDHHS did not contend that PPSAT was providing subpar service to its Medicaid patients, or to any other patients. Instead, PPSAT was terminated solely because it performed abortions outside of the Medicaid program.[1]

         According to SCDHHS, PPSAT's termination was part of a plan by Governor Henry McMaster designed to prevent the state from indirectly subsidizing abortion services. In 1995, the South Carolina legislature passed a law preventing state funds appropriated for family planning services from being used to fund abortions. S.C. Code Ann. § 43-5-1185 (1995). After taking office in 2017, Governor McMaster issued two executive orders designed to further this objective. The first, Executive Order 2017-15, directed state agencies "to take any and all necessary actions . . . to the extent permitted by law, to cease providing State or local funds . . . to any physician or professional medical practice affiliated with an abortion clinic . . . ." J.A. 56-58. The second, Executive Order 2018-21, directed SCDHHS to "deem abortion clinics . . . and any affiliated physicians or professional medical practices . . . that are enrolled in the Medicaid program as unqualified to provide family planning services and, therefore, to immediately terminate them . . . ." J.A. 70-71. SCDHHS responded quickly. On the day the second order was issued, SCDHHS Officer of Health Programs Amanda Williams notified PPSAT by letter that "[t]he Governor's actions result in Planned Parenthood no longer being qualified to provide services to Medicaid beneficiaries" and that PPSAT's enrollment agreement with South Carolina was terminated effective immediately. J.A. 73. As a result, PPSAT's two South Carolina centers began to turn away Medicaid patients. J.A. 13-14.

         C.

         On July 27, 2018, PPSAT and the individual plaintiff (collectively, "plaintiffs") filed suit in federal district court in South Carolina against Joshua Baker, in his official capacity as Director of SCDHHS. The individual plaintiff brought suit on her own behalf and that of a purported class of South Carolina Medicaid beneficiaries who received, or would like to receive, healthcare services at PPSAT. Plaintiffs brought this action under 42 U.S.C. § 1983, seeking injunctive and declaratory relief on the grounds that SCDHHS violated their rights under the Medicaid Act and the Fourteenth Amendment. On July 30, plaintiffs filed for preliminary injunctive relief solely on the basis of their Medicaid Act claims. The district court held hearings on plaintiffs' motion on August 23. In their complaint and at the hearing, plaintiffs argued that the Medicaid Act's free-choice-of-provider provision confers on recipients a private right, enforceable under 42 U.S.C. § 1983, to use the qualified and willing provider of their choice, and that South Carolina violated this right when it terminated PPSAT for reasons unrelated to its professional competence to provide medical services.

         The district court agreed with the plaintiffs and granted a preliminary injunction on August 28, 2018. Because the district court held that injunctive relief was appropriate based on the individual plaintiff's Medicaid Act claim alone, it did not analyze PPSAT's Medicaid Act claim. First, it held that the individual plaintiff's Medicaid Act claim was likely to succeed on the merits. It agreed that the free-choice-of-provider provision confers a private right, enforceable under 42 U.S.C. § 1983, on Medicaid-eligible patients, guaranteeing their right to choose any willing provider "qualified to perform" the relevant service. Critically, the court held that "qualified" should be given its ordinary meaning- professionally competent. Relatedly, the district court rejected South Carolina's contention that § 1396a(p)(1) of the Medicaid Act gives a state plenary authority to exclude providers from its program "for any reason whatsoever as long as the reason is bolstered by State law." Planned Parenthood S. Atl. v. Baker, 326 F.Supp.3d 39, 47-48 (D.S.C. 2018). To the contrary, it held that the state's authority to exclude providers is limited by the free-choice-of-provider provision.

         Finally, the district court found that the other conditions necessary for a preliminary injunction-irreparable harm, balancing of the equities, and the public interest-were satisfied. In weighing the equities, the district court rejected South Carolina's argument that the state would be forced to subsidize abortions if it were enjoined from terminating PPSAT's provider agreement. Baker, 326 F.Supp.3d at 49-50. First, because South Carolina's Medicaid program does not cover abortions except in the narrow circumstances required by federal law, there was no direct subsidization of non-covered abortions. See id. at 47. Second, because "PPSAT is reimbursed for Medicaid services on a fee-for-service basis," id. at 49, at rates that do not cover its costs, PPSAT's participation in Medicaid did not generate excess funds that could be used to indirectly subsidize abortions. See id. at 47, 49-50. Accordingly, the district court granted a preliminary injunction preventing South Carolina from terminating PPSAT's Medicaid enrollment agreement.

         South Carolina timely appealed.

         II.

         The free-choice-of-provider provision lies at the heart of this appeal. As noted above, the provision states that:

A State plan for medical assistance must- provide that any individual eligible for medical assistance (including drugs) may obtain such assistance from any institution, agency, community pharmacy, or person, qualified to perform the service or services required (including an organization which provides such services, or arranges for their availability, on a prepayment basis), who undertakes to provide him such services . . . .

42 U.S.C. § 1396a(a)(23)(A) (emphases added).

         It is difficult to imagine a clearer or more affirmative directive. The provision applies to "any individual" eligible for Medicaid; grants these individuals the right to obtain medical treatment from "any institution" willing and "qualified to perform the service or services required"; and provides that state plans "must" comply.[2]

         Congress could have made an exception for providers offering abortion services. But it did not do so. Because we "presume that a legislature says in a statute what it means and means in a statute what it says there," Connecticut Nat'l Bank v. Germain, 503 U.S. 249, 253-54 (1992), this court cannot write into a statute an exception that Congress did not create. Accordingly, we take the free-choice-of-provider provision to mean that a Medicaid recipient has the right to challenge a state's exclusion of a provider from its ...


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